I’ve talked about this before, but if you have kids, the only surefire solution is curating the videos yourself and downloading them. Then playing them offline. Anything else is a gamble, which may or may not be the route you want to take.
YT cracking down on videos also has a lot to do with skittish advertisers. I’m not sure if a solution is possible other than utilizing Patreon, librepay, etc. Even if you don’t make “controversial” content, that’s what most people do these days for consistency, as well as merchandise.
"In this setting, your child will only be able to watch videos, channels and collections that you have hand-picked. Collections are videos and channels grouped by topics, such as science and music, picked by the YouTube Kids teams or our partners."
YT has proven themselves incapable time and time again when it comes to dealing with human support and services. I cannot read PR text from them and just believe it.